Mr. Chairman, members of the Committee, thank you for inviting me to testify today on the Bush Administration’s nonproliferation policies. Let me say at the outset that the Bush Administration is unique and deserves credit in emphasizing nonproliferation enforcement, particularly in the cases of North Korea, Iraq and Libya. The example the Administration has set in these cases has prompted the most significant debate about how to strengthen nonproliferation since India exploded its first bomb in 1974. We need to exploit this window of interest to toughen nonproliferation enforcement, close as many loopholes as we can, and do so in as country-neutral a fashion as possible.

Towards this end, the Administration itself has proposed a new, tougher set of nonproliferation rules. By far the most important of these have to do with preventing the spread of nuclear weapons and here nearly all of these suggestions can be found among the seven specific proposals the President made February 11, 2004 in an address at the National Defense University (NDU). These proposals are significant. Properly understood, they recommend a sounder reading of the Nuclear Nonproliferation Treaty (NPT), one that is truer to the NPT’s original intent and that deflates the mistaken treaty interpretations that have enabled North Korea, Libya, Iran, and earlier, Iraq to acquire much of what is needed to make bombs.

President Bush rightly characterized these misguided views as a “cynical manipulation” of the NPT. In specific, those who want to acquire or share nuclear weapons technology have twisted the NPT’s call for the sharing of peaceful nuclear technology into an unqualified right to “the fullest possible exchange of equipment, materials and scientific and technological information.” This it clearly is not. As the NPT’s first article makes clear, no nuclear-weapons state party to the NPT (the U.S., Russia, China, France or the United Kingdom) is permitted to “in any way… assist, encourage, or induce any non-nuclear-weapon state to manufacture or otherwise acquire nuclear weapons or other nuclear explosive devices.” Similarly, the NPT’s second article prohibits all other members of the treaty from “manufactur[ing] or otherwise acquir[ing] nuclear weapons” and from “seek[ing] or receiv[ing] any assistance in the manufacture of nuclear weapons.” When the NPT speaks, as it clearly does in Article IV, about “the inalienable right” of NPT members to develop nuclear energy “without discrimination,” it explicitly circumscribes this right by demanding that it be exercised “in conformity” with these two articles.

For years, too little effort has been made to spell out what “in conformity” means. This is what President Bush tackled in his February 11th address. He rightly emphasized that, nations seeking to develop peaceful nuclear energy have no need for either materials that can be used directly to fuel bombs – separated plutonium and highly enriched uranium – or the uranium enrichment and the plutonium reprocessing plants required to produce these materials. As such, he proposed that the world’s leading nuclear suppliers of relatively safer lightly enriched uranium fuel only supply this fuel to nuclear energy developing states that are willing to renounce trying to build enrichment and reprocessing facilities themselves. He further proposed that nuclear supplier states should refuse to sell enrichment and reprocessing and equipment or technology to any state that does not already “possess full-scale functioning enrichment and reprocessing plants.”

Beyond this, the President proposed to strengthen international efforts to interdict illicit nuclear shipments and procurement networks, do more to reduce the accessibility to nuclear weapons usable materials, and tighten procedures at the U.N. nuclear watch dog agency, the International Atomic Energy Agency (IAEA). Finally, President Bush urged that within a year, no nuclear supplier should export nuclear equipment to any state that has not yet signed a new, tougher inspections agreement with the IAEA known as the Additional Protocol.

Mr. Chairman, all of these proposals constitute a needed departure from nuclear business as usual. They all give teeth to the NPT’s prohibitions against the export and acquisition of nuclear weapons and constitute a useful extension of President Ford’s and President Carter’s call nearly 30 years ago to discourage the use of nuclear weapons-usable fuels for commercial purposes. These proposals, though, should not be seen as being all that’s required, but rather as first steps. In fact, several additional measures logically follow from the President’s seven proposals and will need to be pursued to assure the success of the Administration’s policies and of nuclear restraint generally. In specific, building on the Bush proposals, the U.S., other nuclear suppliers and like-mined states will also need to

1. Suspend efforts now to sell nuclear goods to proliferators or countries that export nuclear commodities to proliferators in defiance of the Nuclear Suppliers Group (NSG) Guidelines.

2. View large civilian nuclear projects, including nuclear power and desalinization plants, large research reactors, and regional fuel cycle centers, with suspicion if they are not privately financed or approved after an open bidding process against less risky alternatives.

3. Starting with the US, but including Pakistan and India, formally get as many declared nuclear weapons states as possible to agree henceforth not to redeploy nuclear weapons on to any other state’s soil in peacetime and to make the transfer of nuclear weapons usable material to other nations illicit if the transfer is made for a purpose other than to dispose of the material or to make it less accessible.

4. Refuse to sell or buy any controlled nuclear items or materials to or from new states attempting to develop enrichment or reprocessing plants.

5. Demand that states that fail to declare nuclear facilities to the IAEA as required by their safeguards agreement dismantle them in order to come back into full compliance and disallow states that are not clearly in full compliance from legally leaving the NPT without them first surrendering the nuclear capabilities they gained while an NPT member.

6. Support UN adoption of a series of country-neutral rules that track the recommendations above to be applied to any nation that the IAEA and the United Nations Security Council (UNSC) can’t clearly find in full compliance with the NPT.

7. Build on the successful precedent of Libya’s nuclear renunciation by getting its neighbors, starting with Algeria, to shut down their largest nuclear facilities.

What do these proposals entail? How do they relate to the President’s efforts? Why do they deserve attention now? To answer these questions, each of the proposals is examined more closely below.

1. Suspend efforts now to sell nuclear goods to proliferators or countries that export nuclear commodities to proliferators in defiance of the Nuclear Suppliers Group (NSG) Guidelines. Nearly half of President Bush’s seven nuclear nonproliferation proposals were aimed at restricting what nuclear suppliers can export under the guidelines of the Nuclear Suppliers Group – a multilateral nuclear control regime. One of the most important of his proposals is “that by next year, only states that have signed the Additional Protocol be allowed to import equipment for the civilian nuclear programs.” This is a sensible restriction but it ought not to wait. Indeed, its credibility may be undermined if we fail to speak up and act to back it now. In this regard, a clear test case is China’s recently announced reactor sales to the world’s worst proliferator, Pakistan, a nation that has neither allowed full-scope IAEA safeguards (as required by the NSG) nor signed the Additional Protocol. China announced January 27, 2004 that it intends to become full-fledged member of the NSG. Yet, only weeks later, news reports emerged detailing Chinese plans to build Pakistan two large plutonium producing reactors. The NSG guidelines exclude such sales: NSG members are not supposed to sell any controlled nuclear items to states that do not allow the IAEA to inspect all of their nuclear facilities. Technically, of course, China can claim it can make these sales because it is not yet formally a member of the NSG. Yet, this hardly recommends our being silent. Certainly, if we can’t see anything wrong sufficient to publicly protest these reactor sales to Pakistan -- a country that can hardly justify the financial extravagance of two new nuclear power plants, has the world’s worst proliferation record, and is the least bound by nonproliferation pledges or agreements – on what basis could we protest any other nation’s nuclear imports? Yet, to date, there is no evidence that the U.S. or any of its allies have protested. Instead, our government apparently is preparing to do all it can on the Vice President’s April Beijing visit to sell China a heavily U.S.-subsidized Westinghouse reactor design, known as the AP 1000. This pitch could not be more poorly timed. Admittedly, the French and the Japanese are also trying to sell reactor to China; so there is competition. Still, it would make far more sense for the U.S. to protest China’s sale to Pakistan and to urge Japan and France to join us in withholding nuclear sales to China until it drops its proposed reactor bid to Pakistan. China should at least be urged to hold off until Pakistan reveals all it knows about its proliferation activities. Such an appeal is clearly within our power to pursue. To fail to do so now simply suggests we are not serious about the President’s proposal, backing or strengthening the NSG, or promoting nuclear restraint in general

2. View large civilian nuclear projects, including nuclear power and desalinization plants, large research reactors, and regional fuel cycle centers with suspicion if they are not privately financed or approved after an open bidding process against less risky alternatives. Among the most important of President Bush’s proposals are those that would restrict fresh reactor fuel exports to nations that fail to renounce enrichment and reprocessing and to ban reprocessing and enrichment exports states that do not already have “full-scale functioning enrichment and reprocessing plants.” As the President noted in his February 11th NDU speech, these steps are essential to prevent new states from making nuclear weapons fuel. This is not because we can detect covert reprocessing or enrichment activities in a timely fashion. As our experience with Iran’s and North Korea’s covert enrichment and reprocessing activities demonstrates, we cannot. Nonetheless, it is still important to make new reprocessing and enrichment activities illicit if only to prevent discovered covert reprocessors and enrichers from legally excusing themselves by claiming (as Iran did) that they merely “forgot” to notify the IAEA of their activities. Making the mere possession of such facilities illicit should at least make exposed covert reprocessing and enrichment activities clearly out of bounds. That said, the only sure-fire technical safeguard against suspect nations possibly acquiring nuclear weapons quickly is to prevent them from acquiring significant amounts fresh lightly enriched fuel or generating significant quantities of spent reactor fuel. Lightly enriched uranium can be fed into a covert enrichment line to make a bomb’s worth of highly enriched uranium in a matter of days; spent fuel can be covertly reprocessed to extract a bomb’s worth of plutonium just as quickly. Both of these materials are part and parcel of any large reactor’s operation. This means that we will not only need a rule that will help make suspect reprocessing and enrichment-related facilities illicit, but a country-neutral way to spotlight suspect nuclear reactors as well. How might this be done? Fortunately, Adam Smith’s invisible hand of free markets and competition can help. As it turns out, many large commercial nuclear projects and all suspect nuclear projects in less developed nations are demonstrably uneconomical as compared to less risky options. Nuclear power and desalinization plants have significantly higher capital costs than their nonnuclear alternatives. In less developed countries, the performance of these plants has been abysmal. Given the surfeit of isotope-producing research reactors (nearly 300 are in operation in 69 countries world-wide), there is hardly an economic justification for the further construction of additional large research reactors: One can import medical, agricultural and industrial isotopes from existing machines and send one’s scientists to them to do research much more cheaply than building a large research reactor of one’s own. Virtually all of these existing machines can be converted to run on nonweapons useable fuels. As for recent proposals from the Department of Energy and the IAEA to create regional reprocessing and enrichment parks, these too are a bad buy. Right now, we have more than enough enrichment capacity to supply lightly enriched fuel to the civilian reactors on line. If anything, the lack of demand would suggest the need to downsize existing enrichment capacity further. Reprocessing, meanwhile, is an uneconomical answer to a problem than doesn’t exit: It makes much more sense from a security and economical perspective to store spent fuel in casks and to use fresh reactor fuel than to recycle weapons usable plutonium for civilian reactor use. What this suggests, then, is a simple tenet: Any large civilian nuclear project that is begun before allowing safer alternatives to be considered in an open international bidding process should be considered to be suspect. Certainly, Iran’s power reactor and enrichment activities, as well as North Korea’s entire program, Pakistan’s import of Chinese reactors, Algeria’s large research reactor, Brazil’s proposed uranium enrichment undertaking would all flunk this test. To make this guideline credible, though, the U.S. and its allies will have to apply it to their own civilian nuclear undertakings as well. The good news is we are well on our way to doing this. Germany and the United Kingdom have either terminated state support of their nuclear industry or established clear deadlines for doing so. Recently, the U.S. Congress refused to pass an energy bill that contained billions in guaranteed loans to utilities that might buy new reactors and put aside hundreds of millions of dollars more to build a commercial-sized hydrogen producing reactor. This year, the Department of Energy quietly killed plans to build commercial-sized versions of its Generation IV reactors. We need to continue this sensible trend. Further federal funding of commercial-sized undertakings such as the Westinghouse AP1000 and the ill-starred $6 billion-plus mixed oxide plutonium disposition program should also cease. This should not be seen as anti-nuclear but rather only anti-commercialization. Certainly, if it made sense for Congress and Ronald Reagan to oppose federal funding of such large energy projects on economic grounds 20 years ago, it makes even more sense after 911 and the clear lag in nuclear demand to do so today.

3. Starting with the US, but including Pakistan and India, formally get as many declared nuclear weapons states as possible to agree henceforth not to redeploy nuclear weapons on to any other state’s soil in peacetime and to make the transfer of nuclear weapons usable material to other nations illicit if the transfer is made for a purpose other than to dispose of the material or to make it less accessible. One of the most nettlesome nonproliferation challenges President Bush discussed in his February 11th NDU speech was reining in the nuclear proliferation activities of non-NPT states such as Pakistan. Islamabad’s blatant proliferation activities technically broke no law. Even worse proliferation, however, is possible: There is reason to worry that a future Pakistan might transfer nuclear weapons to another country. In specific, Saudi Arabian officials are reported to be studying how Saudi Arabia might acquire nuclear weapons from another country such as Pakistan. What makes these plans plausible (besides Pakistan’s and Saudi Arabia’s close security ties) is that they could be carried out legally under the NPT. The treaty, in fact, allows nuclear weapons to be transferred to nonweapons state members (e.g., to nations like Saudi Arabia) so long as the weapons remain under the control of the exporting state. This loophole was explicitly inserted into the NPT in the l960s by U.S. officials who were anxious to continue to deploy U.S. tactical nuclear weapons on NATO’s and Pacific allies’ soil. Today, keeping this loophole open no longer looks anywhere near as attractive. In fact, the U.S. has already withdrawn its tactical nuclear weapons from foreign allied bases it had in the Pacific, including South Korea, Japan, and Taiwan. The reason why is simple: With air and sea-launched cruise missiles, nuclear-capable carried based air-craft, stealth bombers, accurate submarine launched and land based intercontinental ballistic missiles to quickly deliver nuclear weapons, there is no longer any need to base tactical nuclear weapons on foreign soil. The U.S. now is withdrawing much of its military from Europe. As these troops come out and concerns about nuclear terrorism and proliferation grow, the rationale for keeping U.S. tactical nuclear weapons in places like Germany will become weaker and the desire to prevent other states from redeploying their nuclear weapons on to other states’ soil will increase. To address this concern, it would be useful to close the loophole in the NPT that allows this. The question is how. Some have suggested that we simply make these nations nuclear weapons state members of the NPT. The problem with this is that such a move would appear to reward states that stayed out of the treaty and violated its tenets. A sensible alternative would be for the United States to work with as many nuclear weapons states to get a formal agreement that henceforth no nation would redeploy nuclear weapons on to another nation’s soil in peacetime. We could also try to get the nuclear weapons states to agree to make the redeployment of such weapons or the transfer of nuclear weapons usable materials illicit so long as the transfer was for purposes other than disposing of these materials or making them less accessible. If the U.S. agreed to impose such limits on itself, it go a long way to persuade other nuclear weapons states, including those that have not yet signed the NPT, to agree to do so as well. Finally, one could mate such diplomatic efforts with initiatives to get as many nonweapons states as possible to agree not to receive nuclear weapons in peacetime on to their soil.

4. Refuse to sell or buy any controlled nuclear items or materials to or from new states attempting to develop enrichment or reprocessing plants. President Bush proposed that nuclear supplier states not sell fresh fuel to nations that are unwilling to renounce reprocessing or enrichment and that they should refuse to sell any enrichment or reprocessing technology and equipment to states that do not already posses “full-scale functioning enrichment and reprocessing plants.” Implementing these rules certainly would help establish a norm against the further spread of commercial reprocessing and enrichment plants. What would help deter new states from developing reprocessing or enrichment, though, would be to cut off the commercial exports from such new plants by getting the NSG membership and as many other states to refuse to buy or sell any controlled nuclear commodities to or from new states attempting to develop enrichment or reprocessing plants. Who would this rule hit hardest? Iran, for one. Nuclear officials there claim that they intend to export reactor fuel from their uranium enrichment and fuel fabrication facilities. If we are firm about what constitutes “full-scale functioning plants,” Brazil and Argentina could also be effected. Brazil is about to launch a commercial enrichment effort at Resende. Officials there concede, however, that their effort would not be able to supply even 60 percent of Brazil’s own fuel requirements until 2010. They have not even reached an agreement with the IAEA about the safeguarding of Brazil’s enrichment facility. Still, Brazilian officials have already announced that they intend to export enriched uranium by 2014. Certainly, if the U.S. and other like-minded nations grandfather Brazil’s enrichment effort as being “full-scale and functioning” while demanding Iran shut its facilities down, the hypocrisy would be more than just clumsy: It would undermine the credibility of the President’s enrichment and reprocessing restrictions for any other country. As for Argentina, it is considering offering reprocessing services to states that buy its large export research reactors. Neither of these countries’ nuclear programs could survive without nuclear imports. More important, neither could credibly push their enrichment and reprocessing efforts without customers. If we are serious about achieving the President’s goals of freezing the number of states that have reprocessing and enrichment plants, pursuing this compliment to the President’s proposals would be useful.

5. Demand that states that fail to declare nuclear facilities to the IAEA as required by their safeguards agreement dismantle them in order to come back into full compliance and disallow states that are not clearly in full compliance from legally leaving the NPT without them first surrendering the nuclear capabilities they gained while an NPT member. The Bush Administration by its actions and words in North Korea, Iraq, and Libya has gone a long way toward establishing the rule that whenever a violating nation fails to properly declare nuclear facilities to the IAEA, it must dismantle them in order to come back into full compliance with its NPT obligations. What the U.S. should do now is propose this requirement explicitly. This certainly would be a helpful country-neutral rule to have in place in dealing with countries like Iran. The U.S. should also make it clear that no nation that the IAEA is unable to clearly find in full compliance with the NPT can leave the treaty legally without first surrendering all the nuclear capabilities it gained while a member of the NPT. The idea here is that one cannot enter into a contract, gain the means to violate it, proceed to do so (or announce the intent to do so), and not be held accountable. Some U.S. government legal counsels have objected to this commonsense requirement out of fear that somehow it might raise questions about the legality of the U.S. withdrawing from treaty obligations, such as the ABM Treaty. Their concerns, however, are unfounded: The U.S. is a law abiding nation that complies with its treaty obligations. If it takes actions inconsistent with a treaty it only does so after it withdraws or because it has formally chosen not to be a party. This certainly was the case with the ABM Treaty.

6. Support UN adoption of a series of country-neutral rules that track the recommendations above to be applied to any nation that the IAEA and the United Nations Security Council (UNSC) can’t clearly to find in full compliance with the NPT. The idea here would be to take advantage of something that so far has frustrated U.S. and allied diplomats – the difficulty the IAEA and the UN Security Council have in making definitive determinations. Rather than wait upon either of these bodies to actually find a specific country in clear violation of the NPT to trigger particular sanctions, it would make far more sense to spell out in country-neutral terms in advance what the consequences should be for any country the IAEA and the UN Security Council cannot clearly find to be in full compliance. This approach has the clear advantage of being country-neutral and of forcing the IAEA and the UN Security Council to reach consensus if it wants to prevent action.

7. Build on the successful precedent of Libya’s nuclear renunciation by getting its neighbors, starting with Algeria, to shut down their largest nuclear facilities. President Bush has rightly spotlighted the success he has had in getting Libya to renounce its nuclear weapons. The challenge now is figuring out how to establish this precedent as a practical nonproliferation standard that can be applied again in at least one other case. In this regard, neither North Korea nor Iran seem particularly promising prospects since they are resisting cooperation, much less denuclearization. The prospects, on the other hand, look much better closer to Libya itself. In specific, now that Tripoli no longer has a nuclear program, it would seem reasonable for its neighbors to reciprocate by at least shutting down their own largest nuclear plants. I first raised questions about Algeria’s need for a second large research reactor over a year ago. This reactor can make nearly a bomb’s worth of plutonium a year, is located at a distant, isolated site, is surrounded by air defense missiles, and only makes sense if it is intended to make bombs. In fact, Algeria already has a second, smaller, less threatening research reactor in Algers. Shutting down the larger plant at Ain Ousseara would save Algeria money and make everyone breathe easier. Then there is Egypt’s large research reactor purchased from Argentina. It too can make nearly a bomb’s worth of plutonium annually. Perhaps Egypt could offer to mothball this plant in exchange for Israel shutting down its large plutonium production reactor at Dimona. The later is so old it will take hundreds of millions of dollars to refurbish it just to keep it operating. Israeli critics of continuing to operate Dimona reactor have publicly called for its shutdown in the Kennest. Certainly, progress on any of these fronts would be helpful in addressing other proliferation problems in the Persian Gulf and elsewhere. The point here, as with the other proposals above, is to build on the clear nonproliferation successes we now have. If we do, we will be safe. If we don’t there will be trouble.